Ron Paul, Daniel Hannan, Lew Rockwell on Freedom Watch

This Wednesday afternoon, Ron Paul joined Daniel Hannan, Lew Rockwell, Tom Woods, Radley Balko, Shelly Roche and Trace Gallagher for an insightful discussion about the latest political and economic developments.

Audio only:Download the show as a podcast here (53:57 minutes).

Part 1: (Ron Paul)
Part 2: (Ron Paul)
Part 3:–jpU7g
Part 4:
Part 5:
Part 6:

Channel: Fox News Strategy Room
Show: Freedom Watch
Host: Judge Andrew Napolitano
Date: 6/3/2009

Transcript of Ron Paul’s appearance:

Judge Andrew Napolitano: Right now it’s my great pleasure to introduce one of the world’s great defenders of human liberty. Certainly the greatest defender of human liberty in Congress today, Congressman Ron Paul joins us from the Cannon Rotunda, that’s the Rotunda of one of the House office buildings.

Congressman Paul, always a pleasure. It’s my favorite part of the week, welcome back to Freedom Watch.

Ron Paul: Thank you, Judge.

Judge Andrew Napolitano: Since we spoke last, which was just a week ago, the federal government has announced a commitment of another 30 billion dollars to bail out a failing automobile industry, to bail out a failing automobile manufacture. Last week at this time we were all talking about Chrysler, now it’s General Motors. Where does this end? What can anybody, a member of Congress, the millions of citizens concerned about their financial future, do to stop this?

Ron Paul: Unfortunately, I’m not very optimistic that the Congress is going to wake up and stop it. I think the move towards nationalization or socialization of all our economy is uncontrollable right now. We already put 20 billion in, now there’s an additional 30 billion. That’s a mere 50 billion. But can you imagine what it’s going to be like when the government runs General Motors? Do you think they are going to make a profit? There’s not a chance a world for that. They’re going to run it like they run the post office. They always need additional funds.

What about Amtrak? Does Amtrak make much profit? Do we put more money into the treasury because we own the railroad? No. It’s a drain. So this is going to be a drain. It just ruins the whole concept of a market economy. It’s the worst thing in the world we can do. The bailout is preposterous, the bankruptcy process was preposterous. It wasn’t really the normal bankruptcy, it was a political bankruptcy.

General Motors should have been in bankruptcy court a year ago. It would have been all over and the good assets would have been brought up and the bad assets would have been wiped off the books, and it wouldn’t have cost the taxpayer one penny. But here we are, 50 billion dollars spent, and before it’s all over its going to be manyfold higher than that.

Judge Andrew Napolitano: Shortly before George W. Bush left the presidency he specifically asked the Congress for authorization to give a loan to General Motors. The House of Representatives, over your objection and despite your articulate arguments against it, authorized a loan of $14 million. Senate never took a vote so the senate never authorized anything. Notwithstanding that, on his own, pursuant to his so called authority given to him under the TARP legislation, he authorized his then secretary of treasury to loan 17 billion to GM.

I think you’re right. I think it would have been better in the long had he not started this ball rolling and had GM declared bankruptcy before the Feds even gave them a nickel.

Ron Paul: Yeah, I think so. And you know, as a Republican we’re not supposed to attack Republicans, but the principle was well put in place with the last administration. If you give $1 billion in bailout and you set the stage and then later on your appropriate $49 billion more, the principle was endorsed by the Republicans in the last administration. So that is why it is so important to deal with this in precise principles. Because if you just open up the crack in the door, this is what happens. This is expected. So the crack in the door now is that we can nationalize anytime a company gets into trouble.

So, it’s going to go on and on. They’ll be other companies and other industries. I mean, do we own insurance companies? Do we own the banks? And it seems like the American people either don’t know or they don’t care or they are hoodwinked into listening to the propaganda just like they get hoodwinked into the propaganda of going to war. It’s just on and on, so that’s why your program is so important, Judge. Trying to wake the people up to the reality of what’ss going on and know the truth of what it is so that we can get our senses back and maybe once again say, “Was this a constitutional provision that we were able to do this? Did we do this under the rule of law?” and of course we don’t. We don’t follow the constitution, we do what we want. So we spend money endlessly and that is why we can expect this crisis to be magnified. We are turning this financial crisis into a currency crisis and that is coming within the next year or two, that’s my estimation.

Judge Andrew Napolitano: I’ll ask you about HR 1207 in a minute, but before I do I’ll say it’s funny you mentioned Amtrak. We did a little research yesterday. There is a quote from President Nixon or someone on his behalf in the White House in 1970 saying, “Don’t worry that we’re nationalizing the Pennsylvania Railroad and the New York Central Railroad. This is only going to be for about 3 years. In 3 years they will be profitable and we’ll sell them to investors and everybody will be happy”. And of course, we all know what happened. That’s 40 years ago, we still own Amtrak and we have poured billions into them. But my question is this: do we become so immune to this that we forget what’s happening? Do we take for granted that Amtrak is there and forget that it’s a drain on the economy and the treasury and forget that it was only supposed to be a temporary experiment?

Ron Paul: Sure. They will forget, if they get a little bit of benefits from it, no matter how much we lose. They would like to forget and not address it and that’s what happens. But that’s why it won’t end until the currency crisis comes in and the country is declared totally bankrupt. Just think of the difference in attitude compared to how the courts ruled with Truman taking over the steel mills in the early 1950s. At least there were a few people who said, “Hey, is he supposed to do this? Does he have the right to do this? Where’s his authority?” It goes to the courts and the court says, “This is unconstitutional”. Now nobody even asks the question. You think we’re going to go to the court and ask whether it was constitutional to buy up General Motors? No way. That’s just not going to happen.

That’s how seriously we have flawed and drifted from the original intent of the constitution and that’s why it is so important for us to wake up, because in the midst of a financial crisis, believe me, the people we have in Washington now will do exactly what they’re doing. They will want more government, more regulations, and they’re talking about the super-regulator who is going to be international. IMF. They want another international currency to solve the problem of the dollar. So their moving in the wrong direction. That’s why we’re in a real desperate struggle now.

Judge Andrew Napolitano: Do members of Congress, even big government types in both parties, take umbrage when the President does these things on his own without even arguably any specific legislation authorizing it? Look, you and I believe that such legislation would be unconstitutional. But do they get mad when he doesn’t even bother to ask for it and he just does this on his own?

Ron Paul: No, they never asked and they just try to justify it in their own mind, and the pragmatism rules. “Well, it would be so much worse if you had deflation”, and they are scared that “it will give us depression” and all these things with which they scare the people. Fear is a powerful weapon that politicians always use both in foreign policy and economic policy. Build up fear and then the people get scared and if you don’t go along with the government you become unpatriotic, un-American. And the idea that you are not a strict constitutionalist isn’t really of any importance. They turn it around and say, “Well, if you’re a strict constitutionalist you don’t care about the people, and you don’t care about helping people and sorting out the problems”.

Judge Andrew Napolitano: We have a little treat coming for you, Congressman Paul. We’re going to be simulcast on the Fox News Channel. My colleague Trace Gallagher, Fox News is in a commercial break at the moment, but we will be going live with him in just a moment as Trace Gallagher and his crew from Live Desk have moved in to our studio. So I do remind everyone watching us on Freedom Watch on the Strategy Room on that if you’re near a television, turn it on to the Fox News Channel because you’ll be able to see, believe it or not, two Judge Napolitanos, two Ron Pauls, and two Trace Gallaghers.

Trace Gallagher: Too much is what it is. Too many people. It’s a great conversation you are having with Ron Paul right now. We’re going to jump in on this and Mr. Paul thank you very much for being here. The question that I have, Judge, and we’re going to go over this more, is about which you sent me on the talking board. I know you talked about the fact about Amtrak that Nixon said 30 years ago “Yeah, they might lose money for couple of years and then they’ll be self-sustainable.” 30 years later…

Judge Andrew Napolitano: You know, I gave that note to my producer, George Szucs, and I said it was LBJ and the […] room went crazy, shouting “I can’t find LBJ saying this!!”, because I forgot it was 1970 because I thought this was done under a Democrat in pre-1968. It was done by a Republican administration and a Democratic Congress, they forced the railroads to merge. New York Central and Pennsylvania railroads became Penn Central and Richard Nixon said, “This is only going to last 3 years, don’t worry about it. We will sell it and make money on the deal”. And look at what happened. The government has run Amtrak at a loss every year for 40 years.

Trace Gallagher: It is. And we’re going to talk about that. I know you have to go back to your guest quickly, judge. And then we’ll continue this discussion.

Judge: Okay, okay. Absolutely. Congressman Paul, I got to tell you that I was scandalized to see these handwritten notes. I don’t know whose notes they are, whether it’s Senator Grassley or Senator Shelby, gutting HR 1207, claiming that they’re making it stronger and precise, but gutting it. This is your bill to audit the Fed.

Trace Gallagher: Judge Napolitano and Ron Paul are talking about nationalization. That’s the whole issue here. We were just talking about this to judge, and I hate to interrupt you because I know that Congressman Paul was about to jump in here, but Judge, we were just talking about Amtrak and Mark and I talked about this at the top of the hour where all of a sudden we had almost 40 years ago where President Nixon said, “Amtrak might lose money for a couple of years, then they’ll be self-sustainable”. And we heard kind of the same thing. 40 years later we still have Amtrak, they’re still losing money. We heard kind of the same thing a couple of days ago with GM.

Judge Andrew Napolitano: A couple of days ago we heard the President saying, “I don’t want to be the President of GM. I don’t want to run an automobile company, this is just temporary, and pretty soon GM will be profitable and will pay the government back”. The government, by the end of the bankruptcy, will have given GM $50 billion taxpayer dollars. Some people on either side of the aisle, Liberals, Conservatives, Republicans, Democrats, Socialists, Libertarians predict that it’s going to be another $20 billion a year. How is GM possibly going to sell enough cars to pay the government back?

Trace Gallagher: And here’s another thing you might be able to answer, it’s one of the scarier things. I was talking to Ray LaHood, the Railroad transportation secretary earlier. One of the scary things maybe for Ford is the fact that, as Judge pointed out, in these days you cannot compete with Amtrak. It is illegal to start a company to compete with Amtrak right now. And if you’re Ford motor company who has taking no money and all of a sudden you have Chrysler, you have lobbyists paid by taxpayers, lobbying a government company and you are Ford you haven’t taken this money and you think what’s going on here. Is this fairness?

Judge Andrew Napolitano: Congressman Paul and I have talked about this, Brian Kilmeade and I have talked about this on radio, you and I have talked about this. The government tilts the playing field to favor its own patrons, to favor its own entity. So the government owns Chrysler, or soon will. The government owns GM, or soon will. What will the government do when people who don’t want to buy from a government owned company start buying from Ford? The government will do something like, “Well, we’ll give you a tax credit if you buy something that our companies have manufactured and you won’t get that tax credit if you buy something from Ford”.

Just like UPS and FedEx can’t compete with the post office for first class mail, just like if you want to provide electricity in the Tennessee valley authority, you can’t compete with that federal entity. Just like if you want to run a train line from Boston to New York you can’t compete with Amtrak. The government will make it impossible or financially not feasible to compete with its companies. That’s not the free market.

Trace Gallagher: And what about lobbying? What about the constitutionality of lobbying? We have people from General Motors going to Capitol Hill to lobby. By the way we can’t hear Ron Paul because… So Congressman, we apologize, we’re going to get you back to the Judge. We can’t hear you if you talk to us because of some kind of quirk in the system. But Judge, you go back to this lobbying thing. Is there some kind of unconstitutionality about the fact that taxpayers are paying for lobbyists to lobby the government?

Judge Andrew Napolitano: Well, sure. Look, the problem with the constitution here is that nobody abides by it in the executive branch. Ron Paul and some members of Congress have complained about this. When Harry Truman seized the steel mills during the Korean War and literally took them over and tried to tell them what to do, (you can’t have a strike, and you have to manufacture munitions), the Supreme Court said, “No, you can’t do that”. Today nobody even makes the constitutional argument.

But think about it; the government is making rules as it’s going along. The government is asking the Congress for whatever it wants, the Congress and the government – by that I mean the executive branch – don’t care about any constitutional prohibitions on this. So taxpayer dollars are going to go to GM to hire lobbyists to lobby the Congress on behalf of GM. It’s a circular move of tax payer dollars with rules being changed retroactively. That is not the free market. Free market means free from government management and control. We are now getting the opposite.

Trace Gallagher: And now, by the way, you have to smoke this, eat this and you have to drive this. Judge Andrew Napolitano, it’s the Strategy Room, it’s streaming live on He is the senior judicial analyst. Congressman Ron Paul, thank you sir for standing by while we did this. Martha, back down to you.

Judge Andrew Napolitano: Thank you, Trace. Ron Paul, Congressman I apologize for that, there was a glitch in the system. I thought we would be able to get you on the Fox News Channel; we will next time.

HR 1207, a bill that has gained incredible support from both sides of the political aisle. Liberals, Conservatives, believe it or not some big government types and obviously those who believe in the constitution and the free market. Your bill to audit the Fed. I have in my hands something I thought I would never see, which is a piece of paper with a portion of your bill on it, and handwritten changes, written in the handwriting I believe of Senator Charles Grassley, claiming he’s in favor of the bill. But if you read the handwritten changes and if they became law, as I understand it, it would gut bill and severely limit the auditing of the Fed to some financial deals that we already know about. The guts of what we want audited would escape your bill if the Grassley amendments become law.

Ron Paul: That’s exactly right, and it’s similar to what they did in 1978. There was a cry at that time to audit the Fed and a bill was passed. The GAO was given the authority to audit the Fed. Then they listed these 4, 5 things that they were exempt from, which were all the important things. Now, in a way, Grassley does the same things. He says, “Well, we can audit this”, and he does provide some auditing in a very narrow sense, but the very important things are monetary policy, the agreements between international banks and central banks and other governments and international organizations, that’s all still exempt. So the fear now is that people here… and I’m getting questions on the floor like, “Hey, you know Grassley did it, why worry about your bill?” So this has undermined it, so we’re going to stick to our guns, we’re going to stick with HR 1207. If HR 1207 gets passed it does everything that Grassley pretends to do plus the important things as well.

Judge Andrew Napolitano: Why do we all need to know what the Fed has done, where the money has come from, where it’s gone and what the deals are that have moved the money around?

Ron Paul: Well, because the Federal Reserve is so powerful. They’re more powerful than the US treasury and the Congress. We gave 700 billion dollars under the TARP funds, which was atrocious and very harmful and we can’t keep up with that. But we’re talking about trillions of dollars, we’re talking about manipulating the market, central economic planning. And we’re involved through the Fed in foreign policy as well. So, if there is a third world nation that’s having trouble, they can bail out a third world nation and give them credits that they can use to go out and buy weapons.

So it’s very involved and we don’t know to what degree they do this. But we’re denied this information. I used to think the Fed was only involved in foreign policy because we spent the money that we didn’t have, so we monetized the debt, and that allowed us to do more things when we shouldn’t. But it’s much bigger than that. Now they do it behind the scenes and we’re not allowed to know.

That is why this attitude which is very healthy right now and is the the reason our bill is getting attention with a 189 co-sponsors, is that people in this country are fed up and they want transparency. They want to see and know what’s going on, not only with the TARP funds, but now they know the Fed is involved. This has never happened before. I think never since 1913 have the people ever rose up and said, “Look, we want to know what’s going on”. So, in a way this crisis that we have has offered us an opportunity and a real challenge. We either win this fight or we lose our country, I’m afraid.

Judge Andrew Napolitano: The President is in Saudi Arabia, preparing to fly to Egypt to give his speech to the Muslim world. Usually we know ahead of time what the President is going to say. We don’t know ahead of time this time. What would you like to hear from him and what are you afraid you might hear from him?

Ron Paul: Well, I haven’t thought too much about what he should say or shouldn’t say, I would just as soon he’d stay home, and talk to them on the telephone or invite them over and chat with them, but tell him we want to be friends with whomever we’re talking to and that we believe in free trade and that we believe in sound currencies, that brings people together. And that we should work for today and get Congress and the American people to understand why we want to remove sanctions from countries like Iran and even Cuba. I think this would be a great promotion for world peace.

So whether he talks to Israel or whether he talks to the Arab Muslim nations or whether he talks to Cuba, we should know what we believe in and then we should work on making ourselves better so that people would want to emulate us and say, “Look, we’re going to give up on this force stuff. We’re not going to force upon the world our views and we’re going to make you better people and you’re going to obey us.” Because, unfortunately, our foreign involvement has been – and this is what I would tell them – it has been that “You do it our way and we’ll give you money. If you don’t do it our way we’ll send you bombs”. And there has to be a third option and the third option can be found in our constitution. We don’t have the authority to run the world and police the world, and we don’t have the money to do it anymore. So the sooner we wake up the better.

Empires always self-destruct. We’re on the verge of doing it, and we better quickly realize that we have to cut back because, you know, the Soviets didn’t have to be beaten militarily, and we didn’t talk them into it. They collapsed economically. And we’re capable of doing the same thing. That’s what we should try to avert, but we have to believe in something and that to me is belief in liberty and belief in our rule of law and the constitution.

Judge Andrew Napolitano: I’ve never heard it said better. Congressman Paul, I don’t know what the crisis will be next Wednesday, but we hope you can join us again. Thanks very much for your time.

Ron Paul: Thank you.


  • Dylan

    I absolutely agree that the FED should be audited, and eradicated if necessary, but disagree with Ron Paul’s policy on Amtrak. The US is in an age of energy crisis, high oil and gas prices, and severe traffic congestion. Amtrak is a more energy efficient means of moving people around than cars or planes, as well as an alternative to the freeway, the gas pump, and the airport, so cutting that out is not a smart move. America needs train service, and improved train service at that. Also, just because it does not make a profit does not mean that it should be eliminated. Does the interstate highway system make a profit? No. They receive massive subsidies and operate at a loss. The airlines also receive huge government subsidies. Amtrak should be treated as a public service for the benefit of the public good as opposed to a mere burden on the government and taxpayers.

  • Christine

    With Obama himself having trouble filling his “team” with tax paying candidates (several non-payers!), you’d think this attention and awareness would highlight the problem within our country! I look forward to the day when the American people can know what the FED/IRS has collected and spent our hard-earned money on, then I think the elite Federal Reserve folks should have to pay it back with interest! And if they miss a payment, we’ll jack up their interest rate to 29.99% or more!

  • Josh O’Morrow

    I concur, when one has the ability to view it from an outside perspective one can see exactly what is happening within the ranks.

    I also firmly believe that they can and will keep on doing what they are doing solely because they BANK on the ignorance of the masses. This makes the majority a type of silent partner, abiding and following the few, like lemmings off a cliff.
    So long as the sheeple follow unquestioning subserviently then I firmly believe they deserve what is coming to them, HOWEVER, those who realize what’s happening are stuck in a thick bog of ignorance, not at all deserving of what is to come…

    -Vicariously I watch, as the whole world dies

  • Phillip Oliver

    I agree with thomas and josh on much of what they say. The only thing I have exception with is for congress to print its own money. This will be as bad as the fed. Our currency should be a commodity currency; silver, gold or platinum. We need to use natural commodities, that have high value in small quantities and will not deteriorate, as currency. Government paper should represent a quantity of that commodity held in the treasury. This in itself will restrain many of the problems that are occuring.

    We need to convert our currency from federal reserve notes to dollars. The value of the dollar has already been assigned a designated amount of silver. Man cannot create gold or silver and therefore cannot devalue our currency with inflation. Government cannot increase our debt in secrecy as it has done so many times.

    Remember, inflation is the MOST unfair tax because it is indirect and hidden by miseducation of the people to think it is a symptom of supply and demand. Inflation is the devaluation of the currency by placing too much in cirrulation. It takes away your ability to purchase goods, the same as a direct tax. With more money you think you have more but in reality with lower value you have less ability to purchase.

    I, like many others, believe this is a deliberate action by those who are controlling the distribution of currency. People are spending more and more energy to maintain their ability to provide a decent life for their families. Both parents have to work, leaving children alone. The value of this extra energy is captured by those that are controlling our currency, the owners of the fed.

    No business can ever survive for long under such a system. Inflation robs their ability to stabilize without continuous growth and debt. With more growth and debt of businesses the fed reaps more profit in interest. This interest comes from government spending as well as interest from all loans to businesses, when banks borrow money from the fed to cover loans to businesses or bailouts of badly managed banks and inflation.

    Convert our currency to silver, as it was originally.

    Abolish the federal reserve act and rescind all legislation connected to it.

    Limit banks to provide services for savings or time savings. Savings banks cannot loan your money but charges depositors a fee for keeping their savings safe. Time savings allows investing of deposits but restricts withdrawals by depositors for predetermined periods of time to avoid runs on the bank. These would also be limited to invest only 90% of deposits and not use loans as an assets to loan more money on, as they currently do.

    There are other things that need to happen with these changes to ensure stability and prevent a central bank from being reestablished.

    This type of economic problem has happened several times in our history and our economy recovered quickly when returning to commodity currency.

    Remember, everyone is inherently greedy and will benefit from their neighbors loss if they will not get caught. (The exceptions are extremely rare). Knowing this, we need to reign in the government officials that have appointed themselves as the intellectual superiors to the public. As long as their lies are allowed to cover up their actions in the media, they will continue.

    They even have the audacity to ask for a definition to sex and try to redefine it for their own benefit. And think you will accept it as fact.

  • Josh O’Morrow

    I think the fact that only 190 of your fellow elected representatives (40%) have opted to audit the fed. This is a clear and concise method in determining who does and does not have the people in mind and who they actually work for (you the people or those who have the money). This is in no way an insult intended to Americans I just wish to express my opinion on your government or at least 60% of them). In all honesty why can’t they answer a single question when questioned, or account for a single thing. Even admit to their fault in this crisis. Utter garbage and the people that vote for them are more ignorant than the people that think earth was created 5000 years ago.

    -A man convinced against his will is a man of the same opinion still.

  • The band aids will not help the economic crisis. There is a systemic problem. The Federal Reserve and all the central banks in the world that are designed on its model are defrauding the people of the world.

    There is no rational reason why the U.S. Congress cannot print its own currency. The Congress was intimidated, bribed and blackmailed into creating and maintaining the Federal Reserve Bank. The Federal Reserve was awarded a contract to manage the currency in America. The cost of that contract to the U.S. has been $10 trillion in national debt.

    To try to cover for the Federal Reserve’s greedy fraud, many countries are being forced to pay into the Federal Reserve coffers to keep the world economy afloat. One of the ways they are being forced to pay is through devaluation of their currencies with respect to the U.S. dollar, which is a way of building up America at the expense of others in the world.

    All of the band-aid measures will fail. The problem is the Federal Reserve, which concept is founded upon debt-based currency and fraud. It must be closed down or it will continue to suck the resources of the U.S. with its currency management contract.


    It is time to let the U.S. currency debt fail, close down the Federal Reserve entirely, and begin on the road to correcting the fraud that lies deep in world economic affairs. It is time to shut down every central bank that mirrors the Federal Reserve. It is time that the people stop feeding the ruling elite through their central banks.


    The Federal Reserve is a cancer that has nearly killed the entire world economy. That cancer must be surgically removed from the world’s economy, or it will soon kill the patient. There is no other viable alternative at this late stage.